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Greetings from Austin, Texas, where the temps have been over 100 degrees for days now and we're trying hard just not to melt.

The global funding boom in 2021 was unlike anything most of us have ever seen before. While countries all over the world saw surges in venture capital investments, Latin America in particular saw a massive bump in dollars invested. Unsurprisingly — with so many people in the region being underbanked or unbanked and digital penetration finally taking off — fintech startups were among the largest recipients of that capital.

The trend continued in the first quarter of 2022, according to LAVCA, the Association for Private Capital Investment in Latin America, which found that startups in the region overall raised $2.8 billion across 190 transactions during that 3-month period ending March 31. This marked the fourth largest quarter on record for investment in the region, the data showed, and represented a 67% increase compared to the $1.7 billion raised in the first quarter of 2021. It also was up 375% versus the $582 million raised in the first quarter of 2020.

Notably, fintech startups were by far the largest recipients of venture capital funding in the 2022 first quarter, with 43% of dollars raised — or $1.2 billion – having flowed into the category. That’s up from 16% in the first quarter of 2021. Meanwhile, investments into fintechs made up 30% of all deals in the second quarter, compared to 25% in Q1 2021.

Image Credits: LAVCA

Carlos Ramos de la Vega, director of venture capital of LAVCA, told TechCrunch: “We have continued to see the cross-pollination of business models within the sector: Payment platforms are increasingly incorporating BNPL alternatives, lending platforms have become full-service digital banks, challenger banks have expanded their product suite to include embedded credit products and working capital facilities.”